Auckland CBD building leased to university
The nine level building for sale at 1-11 Short St, in the Auckland CBD.
A nine level Auckland central city office building, that generates annual rent of over $1 million from the University of Auckland, has been put on the market.
“This sale represents an opportunity to invest in Auckland’s CBD, with the comfort of having a long-term tenant in place,” says John Binning of JLL, who is marketing the freehold property at 1-11 Short St through an expressions of interest process, closing on Thursday, December 15.
Binning says the 4950sqm building was constructed in 1971 and has been substantially upgraded for educational use, since the university occupied it in 1995.
“The university uses the Short Street building near Eden Terrace for its Centre for Continuing Education. It has a lease term of 12 years and five months from August 2011, with two three-year right of renewals, giving a potential final expiry date of December 31, 2029.
“The building brings its owner around $1,020,000 per annum and it appears to be about 20 per cent under-rented,” Binning says.
“A number of neighbouring office buildings have been converted to residential uses. When the university’s lease expires, the owner will have the option of adding value to the building by converting it to residential, or continuing to lease it out as an investment property.”
The 1342sq m site is on fittingly named Short Street - a small side street with an easy slope running down from Eden Crescent to Anzac Avenue.
“It is just around the corner from the university’s main buildings on Princes Street,” says Binning. “The location is handy to many amenities including the Auckland High Court, Vector Arena, the Pullman Hotel, the Britomart transport centre and shopping precinct, as well as Auckland’s numerous waterfront cafes and restaurants. Queen Street is five minutes’ walk away, via Shortland Street.”
The property is easily accessible via the main arterial roads of Customs St and Symonds St in an area well served by frequent bus, train and ferry connections.
Binning says the immediate vicinity comprises older style commercial buildings that are mostly secondary grade office space.
“Over the past decade, newer office developments have been constructed in the area and some of the properties have been refurbished for offices or accommodation. Many of the nearby buildings are occupied by the University of Auckland or other educational tenants.”
The building has two carparking levels on its Anzac St side with secured undercover space for 46 vehicles and two levels of office above. These levels have large, irregular floorplates and a higher than normal ceiling height of 3.2 metres, allowing for internal lecture rooms.
A further four levels of office space above cover an area of around 620sq m and there is a further 400sq m of space on the top floor.
Binning says the attraction of the building as an investment property is enhanced by the quality of its tenant.
“The University of Auckland has been ranked New Zealand’s leading university in the QS World University Rankings 2016. It is the only New Zealand university in the top 100 in the world.”
The university describes the Centre for Continuing Education, which occupies the Short St building as “offering access to the university's knowledge and research, and encouraging the two-way flow of ideas between the university and Auckland’s many communities.
“It is a partnership between academics within the university and with practitioners and organisations to develop and deliver courses, seminars, workshops and events,” says Binning.
John Binning of JLL.